The House Ways and Means Committee on Monday, August 2, approved the draft measure that aims to define the tax rates for propriety educational institutions (PEIs) and allow them to avail of preferential rates on taxable income.

House ways and means chairperson and Albay Representative Joey Salceda said the panel has reached a consensus and came up with a draft bill adopting some recommendations of the Coordinating Council of Private Educational Associations (COCOPEA) regarding preferential tax rates.

The draft, he said, clarifies that the preferential tax rate, which is one percent of private schools’ taxable income under the Corporate Recovery and Tax Incentives for Enterprises Act or CREATE Law will apply to all proprietary schools.

The still unnumbered bill – a consolidation of House Bill Nos. 9573, 9577, 9596, and 9672 – aims to intervene in the Bureau of Internal Revenue’s (BIR) recent regulation increasing the tax rate of PEIs from 10 percent to 25 percent.

Salceda said passing the measure into law will help private schools retain their existing personnel and hire additional teachers during the COVID-19 pandemic.

The bill would also help release private schools from any possible legal liabilities during the period that the law was unclear as to their treatment.

“I think the whole committee agrees that we should provide them relief,” Salceda said during the hearing.

House Deputy Speaker Rufus Rodriguez also said he finds it necessary to pass the measure to prevent another possible “reinterpretation” of the law.

“The State recognizes the complimentary roles of the private schools in our educational system...and the Constitution mandates this,” said Rodriguez.

“Therefore...we need to have a new law because, in some other time, there might again be another twisted interpretation of the Constitution and it will put another setback to our educational system while the private school system has been helping us,” the Cagayan de Oro City representative said.